Don’t fall for high-pressure sales tactics, the promise of guaranteed returns or too good to be true claims. You should check out the red flags of investment fraud on Investor.gov as well as check to see if the investment professional you’re dealing with is registered. Take time to make the right investment decision for you. Ask questions and demand clear answers. You can find sample questions, such as “Who exactly am I contracting with?” and “What will my money be used for?” here.
You should understand if you lose money there is a real chance the SEC and other regulators won’t be able to help you recover your investment, even in cases of fraud.
If you do choose to purchase digital currencies or tokens, recognize that they are new. There may be significant risk involved in putting your money into something that hasn’t been around very long. A good rule of thumb when investing in a new product is to only invest money that you are willing to lose, so that it’s not financially devastating if the investment doesn’t pan out. One way to spread risk is to diversify your investments. Don’t put all of your eggs in one basket. That way, if one of your investments loses money, the other investments can make up for it.
Cryptocurrencies may be today’s shiny, new opportunity but there are serious risks involved. Proceed with caution, do your research, evaluate your financial goals and most importantly, don’t flip a coin when you’re making investment decisions. Before you invest, go to Investor.gov to learn how to invest wisely and avoid fraud.
The Securities and Exchange Commission disclaims responsibility for any private publication or statement of any SEC employee or Commissioner. This article expresses the author’s views and does not necessarily reflect those of the Commission, the Commissioners, or other members of the staff.